EA's quarterly losses, annual income climb

The world's top third-party publisher lost $25 million during its most recent quarter but took in over $3 billion during the previous 12 months.

According to the research firm The NPD Group, January, February, and March were a collective boom time for the US game industry. Today, though, the biggest third-party publisher in the business reported an increased loss for the first quarter of 2007.

For the three months ending March 31, Electronic Arts posted a net loss of $25 million, up from the $16 million shortfall it suffered during the same period in 2006. The company took in $613 million in net revenue during the quarter, down 4 percent from the $641 million it took in during the same period in 2006. In a statement, EA said its increased loss was "primarily due to the transition to next generation systems." It also cited a onetime $24 million charge it incurred due to "after-tax stock-based compensation charges."

The Redwood City, California-based publisher had only a few major releases during the quarter. However, those that did sell sold well. The Sims 2: Seasons expansion pack topped more than 1 million copies worldwide, with Burnout Dominator and Def Jam Icon moving 500,000 units apiece. Though he didn't give sales figures, EA CFO Warren Jenson did say during an analyst conference call that Command & Conquer 3: Tiberium Wars was a "successful relaunch" of the series. According to NPD data, the game has sold more than 128,000 copies on the PC in the US; an Xbox 360 version was released today.

While $25 million is a princely sum to most companies, EA's quarterly loss was dwarfed by the publisher's annual revenues. For the 12 months ending on March 13, 2007, the company took in $3.09 billion in net revenue, 5 percent more than the $2.95 billion it posted during its prior fiscal year.

However, virtually all of the $1.88 billion in gross profit the company took in during the year was wiped out by expenses. The company spent $107 million on stock-based compensation charges during the year and went on a shopping spree that saw it acquire independent developer Mythic Entertainment, Headgate Studios, and Battlefield-maker Digital Illusions CE.

Unsurprisingly, EA's biggest game of the year was Madden NFL 07. As of the end of March, the game had sold more than 7.1 million copies on 11 platforms in the US, a 15 percent increase. As for what the rest of the world calls football, EA's lock on the FIFA soccer license translated into 13 million games sold internationally, including FIFA 07, FIFA Street 2, and 2006 FIFA World Cup. Overall, Jenson said that EA Sports' revenue was up more than 20 percent for the year.

EA's second-best-selling game during its last fiscal year was Need for Speed Carbon, which Jenson said sold more than 8.5 million copies internationally. That bested both The Sims 2 Pets, which sold 5.6 million during the year, and The Sims 2, which sold 3.9 million. However, it wasn't good enough to beat the whole Sims franchise, which moved a whopping 22 million titles during the year, according to Jenson.

Looking ahead, EA now predicts net revenue for its current fiscal year to be between $3.1 billion and $3.4 billion. Major titles set to launch during that period are Medal of Honor Airborne, Army of Two, Boogie, MySims, Battlefield: Bad Company, Skate, and the next Need for Speed and Madden titles. EA estimates that it will take in $300 million to $360 million during the current quarter, which ends June 30.

As of press time, EA stock was down more than 2.6 percent in after-hours trading, selling for $1.39 less than its $52.94 closing price.

84 Comments

  • generalvonngene

    Posted Dec 30, 2007 1:27 am PT

    fuk all ea haters!!! my dad works in ea and he makes many money bcuz of ea...maybe u should konw ea well b4 u comment.

  • SeoTaijiFan

    Posted Jun 7, 2007 12:14 pm PT

    I understand the expansion packs to the sims like "Pets" or "Open For Business" (I have both of them plus University) but what's with the little "bonus" packs that give new clothes and stuff? that's stupid. They sell for close to the price as the actual games it's ridiculous and it seems like a new one is coming out every month. EA should stick to making quality expansion packs for the sims instead of stuff we can download off sims exchange or whatever. And what's with the game games they are making being like clones of each other? there's 8 million racing games, skater games etc. Think original.

  • andrew3000

    Posted Jun 2, 2007 2:52 pm PT

    They need to reduce prices on games like sims 2, cuz they sell the same game just with different names for the same price. RIP-OFF!

  • thebubbleprince

    Posted May 31, 2007 5:29 pm PT

    these **** delayed SPORE! *Sends prank emails to EA!*

  • Lord_Waffles

    Posted May 16, 2007 11:54 am PT

    I'd say good ridance, but than again, The SIMS! hahahah. They'd do alot better if they'd make more games instead of just making more football clones, and converting existing games people have already played onto EVERY system they can find.
    "Cell Phone Sims2" They profit BIG when games initially come out, they lose money(Time, credit, resources) when they keep converting the same thing.

  • rogermao

    Posted May 16, 2007 1:36 am PT

    I dont tihnkEA is very good, i prefer other companies

  • theKSMM

    Posted May 15, 2007 10:30 pm PT

    Three...billion...dollars.

    Wow.

  • kappareign

    Posted May 13, 2007 7:01 pm PT

    ive never purchased an EA game... not because of their crappy business practices in the past - they just make **** games. gotta churn out a new game from a series every year whether its done or not, gotta make their money, not quality games

  • hale30

    Posted May 13, 2007 5:05 pm PT

    agree with matchlegacy man this game gets boring but try doin it with no cheats cause that is wut u probaly did and all thoses action games are really fun like battlefield 1942 and the Sims 2 for pc man there is 10 million more stuff u can do in that game

  • jamietje

    Posted May 12, 2007 10:35 pm PT

    thats what you get ea for messing with CNC3!!

  • thomas10soa

    Posted May 12, 2007 3:59 am PT

    thats coz ea suck

  • darknferno12

    Posted May 11, 2007 10:50 pm PT

    Who can they buy out to fix this?
    Anyway they should just go back to the time when people liked EA and they should make a few good games not just updates

  • MatchLegacy

    Posted May 11, 2007 2:41 pm PT

    Wow, what a bore.

    Gaming companies suck now. Nothing new. Ever.

    Who cares if EA's releasing more sims games? The game got old after the first 200 expansions released for it. Gimme a break.

    Carbon sucked. Sports games are overrated. Battlefield is overdone (and their servers are terrible). No one cares about linear action games like Medal of Honor and Call of Duty; they're boring and too limiting.

    Can't ANYONE out there make a GOOD GAME?

    Spore is delayed another year.

  • neonblueshadow

    Posted May 9, 2007 9:59 pm PT

    EA is the strongest publisher in the US. They're also the most profiting corp inthe US. This loss isn't all that bad for them and its very temporary, B/c switch to next gen consoles is a costly jump, you have to upgrade all your development systems, and testing systems, and all the new equipment is extremely expensive because they are new with high manufacturing costs. EA is also probably best placed for the next generation because they can afford to have all the equipment set up quickly, and work out the kinks quicker. This company is only going to get stronger in the near future ( Hellgate, Army of Two, and Spore, in addition to their usual soap opera franchises). Think before you bash them, and be real about it. Its not so easy to top these guys in marketing/ sheer publishing muscle and out of all the fluff they DO have several good games. ***edit***

    Completely agree with mrarmagedon. Oh and I forgot to mention Crysis as an anticipated title.

  • wings-and-gills

    Posted May 9, 2007 4:42 pm PT

    Wow. No wonder they sold out a Stuff Pack to H&M.

  • ashuncc2

    Posted May 9, 2007 2:55 pm PT

    Used game sales only count as revenue to the retailer that sold it. LinKuei_warrior i bought a used EA game...then returend it...does that count?

  • littlerism

    Posted May 9, 2007 2:25 pm PT

    never seen the point in annual updates to be honest. dont see the point in forking out money for the same game as last year but with an 08 on it

    then again theers no accounting for taste

  • gtjava

    Posted May 9, 2007 1:59 pm PT

    i just want my fifa 08

  • banodyne

    Posted May 9, 2007 11:18 am PT

    Never been a fan of EA's business practices so I'm having a moment of schadenfreude. (Love having a chance to use my favorite word.) Nothing against the games or the programmers. Just the suits.

  • SolidSnake2020

    Posted May 9, 2007 10:09 am PT

    too bad,

  • rah_mhambrey

    Posted May 9, 2007 9:38 am PT

    again the ndp numbers do not include online sales for cnc3 so i can bet it has sold more than that......

  • Hillsy_

    Posted May 9, 2007 8:08 am PT

    @extremepleasure - Agree totally. But wait a minute, Road Rash on the 3DO you meant, right? The best version, or are we not in agreement. I think EA went down after the Amiga as most of there games now are unoriginal and boring. It is such an easy path to follow, bring out the next madden game with slightly better graphics and up-to-date player information and stats, then sell it to the public. The problem is, we buy it so EA release it. Don't we all decide on what we are going to buy? If there is a demand, EA will release it. The above games must be popular. Then again, look at The Sims 2, how many expansion packs are there now? it sells, why would EA not want to produce more. They are in it for the profit. Games as a whole are becoming more mass market. Look at how the PS3 and 360 are becoming one console...same games for each(in most cases)....A Pattern...

  • crusader8463

    Posted May 9, 2007 8:05 am PT

    lol i just think its funny how much people hate EA. they are like the walmart of the video game industry. everyone hates them but everyone seems to keep buying there games sigh... maybe walmart and EA should become one company and be known as the worlds most hated/used company lol.

  • Bronson2k3

    Posted May 9, 2007 7:25 am PT

    All Pro 2k8 will eat away at there monopoly and Madden and EA will continue to lose$$$

  • Sam_Lowery

    Posted May 9, 2007 7:24 am PT

    lol, I love how all the comments are things like "screw EA", "I hope they go out of business" and stuff like that.

    The best part is that they soured publics opinion against themselves by pumping their games full of product placement, treating their employees like garbage, and all the other shady business practices their into. They still have a long ways to go before their bankrupt, but I'm just stoked to see so many other people that hate EA as much as me

  • Limonadi

    Posted May 9, 2007 6:12 am PT

    Im so excited! i wanna that ea buys GTA. so we dont see blood in games ever again.

  • Digz005

    Posted May 9, 2007 5:51 am PT

    LOL EA will continue to grow and consume, you cannot stop it millions will buy Madden, NBA live, Need for speed, you cannot stop EA soon they will have their own console and Millions will weep purchasing the new madded on their console named "TheOnly"

  • MorbiD_PiXie

    Posted May 9, 2007 5:16 am PT

    lol @ "and the next Need for Speed and Madden titles."

    Whats that gonna be ? "Need for Speed - Spoiler" or better yet "Need for Speed - RICE FOREVER"

  • beckoflight

    Posted May 9, 2007 4:55 am PT

    YEAH ... go down EA who care !!! I'm glad go down with your sports games !!!!

  • Death_Masta187

    Posted May 9, 2007 4:47 am PT

    You make crap you get crap.... The only news that would be better is "EA is closing their doors for good"

  • slayer1090

    Posted May 9, 2007 4:21 am PT

    I'm glad they lost money becuase EA has only been making half-ass games

  • Rickiej

    Posted May 9, 2007 4:16 am PT

    I would'nt care less, Most of the games EA ships are crap.

  • n8berman

    Posted May 9, 2007 2:33 am PT

    Too bad for EA they can only release Madden once a year.

  • Khoo1992

    Posted May 8, 2007 11:42 pm PT

    Making some cheap quality games and sell at a high price, still having loss, EA can go to hell!!!

  • smoothn00dle

    Posted May 8, 2007 11:24 pm PT

    I dislike EA, their generic games. Like Maya said: "Try to look for what people want and then try to make that game design". I call it Gay design concept *v*

  • 360player_eq12

    Posted May 8, 2007 10:37 pm PT

    i guess making about 20 of the same game for each system dosent hurt sales =/......

  • Brizen__Beez

    Posted May 8, 2007 10:36 pm PT

    Reading this article basically makes me ashamed at how much revenue such a developer could make. It's freaking unbelievable. Really I have no comment except for admitting that I am part of those figures and should be ashamed of myself that they make so much money.

  • decoy1978

    Posted May 8, 2007 10:36 pm PT

    Cwagmire sums it up best. Those of us here on these forums are the minority. EA caters to everyone else. They'll buy the sports game regardless if its good or bad.

  • DoctorFu

    Posted May 8, 2007 9:12 pm PT

    That NFL buyout didn't payoff too well for EA.

  • 360player_eq12

    Posted May 8, 2007 9:06 pm PT

    woot cant wait for need for speed 32, and madden 2080.

  • zsc4

    Posted May 8, 2007 9:04 pm PT

    EA...I don't see what i can comment of them

  • ocdog45

    Posted May 8, 2007 8:34 pm PT

    wait till ncaa and madden comes out

  • mrarmagedon

    Posted May 8, 2007 8:28 pm PT

    *A day in the life of a gamer *


    OMG EA sucks their company is too Big and is all in it for the money I won't support them!! Oh wait a minutes I think I'll drive my Dodge to go get a cup of coffee from Starbucks. Then I think I'll go fill up at Mcdonalds. MMM that was good now I think I'll go to Walmart and buy some cheap crap. Wow that was fun I'm glad I'm a gamer who supports some businesses instead of huge ones like EA!

  • cwagmire

    Posted May 8, 2007 8:03 pm PT

    The majority of gamers are casual gamers and they buy sports games, games based off movies, etc. EA has a license for nearly every sport now so of course people will continue to buy them regardless if they are good or not. We, "hardcore gamers" who visit gaming sites frequently are in the minority. EA doesn't care about us really. They know their games are nothing special from the year before but as long as the casual gamers buy it, they'll keep making sub-par games. A sad trend really.

  • TurtlePerson2

    Posted May 8, 2007 7:46 pm PT

    I think that EA will do better when some of their big franchises and anticipated titles such as MOH and Crysis come out. That said, I think that EA has to change their business model so that they don't alienate hard core gamers.

  • Predator_Spear

    Posted May 8, 2007 7:07 pm PT

    money, money, money, worship the all mighty dollar.

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